Court action on BOV is last resort – watchdog
‘No guarantee of a speedy recovery of money owed’
Aggrieved investors were yesterday told by the financial services authority that court action against Bank of Valletta would be taken as a last resort.
All possible avenues to achieve restitution should first be exhausted
The Malta Financial Services Authority was reacting to calls by a representative of investors for the regulator to take the bank to court after it ignored recommendations to compensate them.
“All possible avenues to achieve restitution, including an insistence that Bank of Valletta shoulder its responsibilities towards investors, should first be exhausted,” the MFSA said.
The authority said court action was no guarantee of a speedy recovery of money owed. It noted that there were 20 pending court cases involving depositors of BICAL, a bank that suspended operations in 1973.
“There is, therefore, no guarantee that action through the courts against BOV will result in quick payments to aggrieved investors,” the MFSA said.
On Tuesday Paul Bonello of Finco Treasury Management, who represents a number of aggrieved investors, called on the MFSA to have more personality and follow up its recommendations with court action.
His words were echoed by Nationalist MEP Simon Busuttil who told The Times yesterday that BOV should bring all outstanding claims to “an immediate settlement” in line with the decisions of the authority.
The case revolves around a high risk investment product sold by the bank to inexperienced customers, who were led to believe they were depositing money in safe bonds.
After conducting a number of investigations the MFSA found BOV guilty of misselling the product and recommended the restitution of funds. However, the bank has refused to comply in a number of cases.
The authority insisted it never shirked its responsibilities at law and will not hold back from using its regulatory and supervisory powers “at the appropriate time” and not before it explored all other avenues.
Over the past year BOV was found in breach of licence conditions on a number of separate cases and was fined more than €700,000.
In a statement the bank yesterday said it had reached an agreement with customers “in a good number of cases”, while investigations and discussions were still in progress on other cases to find a “just and equitable arrangement”.
The bank also admitted it had rejected some 39 customer complaints.
ksansone@timesofmalta.com